Contributed by Robert Dalby.
On February 10, 2022, the U.S. Congress passed an important piece of legislation with overwhelming bipartisan support which will directly impact many employers and employees. Called the “Ending Forced Arbitration Act,” this law, once signed by President Biden, will prohibit employers from forcing employees to submit claims based on workplace sexual harassment and sexual assault to arbitration. This is an important change in the law that both employers and employees need to know about.
Arbitration is an alternative legal dispute resolution method whereby the parties to the dispute submit their claims and defenses to a paid arbitrator, which acts as private court to decide the dispute, rather than a traditional court of law. Sometimes, employers will require their employees to submit some or all legal claims they have related to their employment to arbitration as a condition of employment. Supporters of arbitration argue that it keeps costs lower compared to traditional in-court litigation. Employers also like to use arbitration to keep disputes out of the public eye, since arbitration proceedings and rulings are typically confidential. Opponents of arbitration, however, argue that it gives employers, who typically have more financial resources, an unfair advantage because arbitration keeps employee claims secret and are decided by a private party, typically paid for by the employer, who is not bound to follow the law in the same way a traditional court must. This new legislation is a win for arbitration opponents as it prevents employers from requiring arbitration for sexual harassment and sexual assault claims, although it is limited only to those types of claims. Here’s what we believe employers and employees should know about the new law:
Employers
While some employers have moved away from requiring arbitration due to the negative public perception of arbitration, many still use arbitration as a condition of employment. Employers should immediately review their employment policies to ensure that they do not conflict with the Ending Forced Arbitration Act. The Act applies to all cases in federal, tribal, or state courts and prevents courts from enforcing any arbitration agreement that requires arbitration for sexual harassment or sexual assault disputes. If your company or organization currently has arbitration policies in place, you need to be sure that they do not cover workplace claims involving sexual harassment or sexual assault disputes. Sometimes, this can be as easy as specifying that the policy does not cover those claims. We at Miller Butler are happy to review your policies and help you revise the language so that you do not run afoul of the law. This is also an excellent opportunity to review all of your workplace policies for compliance with any new or updated labor laws.
Employees
It is important that employees are aware of their rights when it comes to their relationship with their employers. The Ending Forced Arbitration Act is an important protection for employees who have been the victim of workplace sexual harassment or sexual assault. If your employer requires you to submit legal claims against it to arbitration instead of a court of law, they will no longer be able to force you to submit claims based on sexual harassment or sexual assault to arbitration. This means that if you have, or think you have, these claims against your employer, you and your attorney can seek a remedy in court with the full due process and protections of the legal system. If you think you have been the victim of workplace sexual harassment or sexual assault, or other workplace wrongs, our litigation team at Miller Butler is ready to help you pursue claims.
